After months of negotiations, Swiss banking giant UBS and the U.S. government announced Wednesday that they have reached a settlement in a lawsuit over the names of American account holders.

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After months of negotiations, the Swiss bank UBS and the U.S. government have agreed to a settlement in a lawsuit over secret bank accounts and suspected tax evasion. Details haven't been released yet. The U.S. wants UBS to turn over the names of 52,000 Americans. They're people who had UBS accounts and who the U.S. believes were avoiding paying taxes.

As NPR's Greg Allen reports, the case has already begun to lift the veil on Swiss banking secrecy.

GREG ALLEN: UBS is the largest Swiss bank, one that in recent years greatly expanded its U.S. presence. Some of its activity in the U.S. the government says was illegal. Between 2000 and 2007, the Justice Department says UBS helped Americans set up offshore accounts in a manner that was designed to help them evade paying taxes.

In February, UBS admitted wrongdoing and agreed to pay a $780 million fine. The U.S. then filed a lawsuit seeking the names of all 52,000 American account holders.

John Coffee, an expert on securities law and white-collar crime at Columbia Law School, says he believes the government would be happy with many fewer than the names of all 52,000 American customers.

Professor JOHN COFFEE (Law, Columbia Law School): I think what the U.S. mostly wanted were the names of the largest accounts. They might have been happy with a settlement that gave them the names of all individuals who had accounts over, say, a half-million dollars. That would have given them the heavy hitters, where the significant tax evasion was possible.

ALLEN: How many names UBS releases of American account holders will be important. Equally important is what criteria UBS and the Swiss government are using in deciding which names to turn over. Under Swiss law, tax evasion isn't a crime, but tax fraud is. It may seem a narrow distinction, but Coffee says it's one the Swiss may try to make in determining which names it releases to U.S. authorities.

Prof. COFFEE: You would find that most simply, if you found an individual who was receiving ordinary income directed to him in Switzerland, even though he might have earned the income outside of Switzerland, that shows a pretty strong intent to receive money so he wouldn't have to disclose this income to the U.S. IRS.

ALLEN: For months, Switzerland and UBS resisted the U.S. demand to turn over the names of account holders, saying doing so would violate Swiss bank secrecy laws and international tax treaties. With the settlement, UBS and Switzerland are expected to preserve some measure of Swiss bank confidentiality. But even so, damage has already been done. Since the lawsuit was filed, hundreds of Americans with offshore accounts have voluntarily come forward under an IRS amnesty program. Many more are now expected to do so.

Martin Press is a tax attorney based in Fort Lauderdale who represents dozens of people with secret accounts at UBS and other Swiss banks. He says while he has many clients who have reported their accounts to the IRS, he has others whom he characterizes as risk-takers, people who've been waiting to come forward until they saw what happened with the lawsuit. For those people, Press has a message.

Mr. MARTIN PRESS (Tax Attorney): I would not play the odds anymore, and I would go into the voluntary disclosure program because once those accounts are turned over to the U.S., it is no longer a voluntary disclosure.

ALLEN: Which means people with secret offshore accounts could be prosecuted. Three UBS customers have already pleaded guilty to tax evasion charges brought by the government, and many more prosecutions are expected to follow. And it's not just UBS customers for whom the world has changed. After the settlement is concluded, U.S. prosecutors are expected to seek similar information from other Swiss banks, and eventually, offshore banks in other international tax havens.

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